New Delhi, Sept. 1 -- The problem with European regulators, a German businessman recently told me, is that they are too scared of downside risks. "In any innovative new business sector, they overregulate and stifle any upside potential." In contrast, he argued, Americans care more about the upside potential, and thus hold off on regulation until they know far more about the consequences. "Not surprisingly, the United States has much more of a presence in innovative industries."

Artificial intelligence (AI) is a case in point. The EU enacted the world's first comprehensive AI regulation in August 2024, establishing safeguards against risks such as discrimination, disinformation, privacy violations and AI systems that could endanger human ...